Now that change has come, the jubilation and euphoria consuming West Bengal will subside in the coming weeks, and the relatively mundane task of providing good governance will loom large before the Trinamool Congress leadership.

It might be worth looking back to the late 1990s.

The economic circumstances in West Bengal today and India in 1998 were similar. India had conducted nuclear tests in May 1998 that invited the ire of the international community. Tough economic sanctions were imposed that hurt India’s economy, which was then quite dependent on international aid and assistance from the International Monetary Fund and the World Bank.

“We must grow faster. We can grow faster. We simply have no other alternative,” Prime Minister A.B. Vajpayee said after winning elections in 1998 in an address to the Confederation of Indian Industry. “I have inherited a weak, deficit-ridden economy. But I am not complaining. My job is not to harp on the past but to look to the future.”

Clearly, the new government faces a huge challenge on the economic front. What should it do to extricate itself from this tangle, deliver sound governance and solidify its long-term political prospects in the state?

India’s history tells us that it takes either a severe crisis or a visionary leader to push the liberalization agenda forward. In 1991, a balance-of -payments crisis forced then-Prime Minister P.V. Narasimha Rao’s hand to put India on the road to economic reform.

This is where the rhetoric is important. Once those initial reforms were in place and India pulled back from the brink, Prime Minister Vajpayee inspired Indians to think big: “India is on the move,” he proclaimed in 1998, exhorting Indians to “draw up big plans.” When he talked of 8% growth back then, few took it seriously. In fact, then-Leader of the Opposition Sonia Gandhi derided talk of 8% growth as “Mungeri laal ke haseen sapnay,” referring to a popular sitcom about a dreamer.

In 1999, strengthened by a renewed electoral mandate in elections called after an ally withdrew support to the fledgling BJP government, Prime Minister Vajpayee’s government unleashed further reforms which have been credited by Columbia University economist Arvind Panagariya as laying the foundation for sustained GDP growth. Five years later, though the BJP unexpectedly lost the general election, India’s economy grew at over 8% for the first time. Courageous rhetoric, when combined with bold reforms, can be transformational.

Mamata Banerjee, the leader of the Trinamool Congress, currently enjoys a credibility and stature that few Indian politicians can match. Ms. Banerjee has been a vociferous opponent of the Left government for years and has suffered vicious physical attacks from Leftist hoodlums.

How she proceeds to spend that political capital will be a key determinant of the shape of the new government’s policies and the future direction of West Bengal. Decades of mismanagement have dented not just West Bengal’s balance sheet but also its brand and its people’s self-confidence.

The new government will have to not just fix the state’s dire economic situation, but also rekindle self-belief so that West Bengal can rebuild itself as an economy of makers, not takers. This calls for bold steps to privatize state-owned companies, reduce the footprint of the government, attract industrial investment, promote entrepreneurship, invest in roads and infrastructure, widen the tax collection base and above all, to implement policies that put markets and consumers first.

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